Republicans’ Next Anti-democratic Goal is Entrenching Climate Denial

By Yevgeny Shrago, policy director for Public Citizen’s Climate Program

The last two years have shown just how far Republican officials are willing to go to subvert the will of the majority. They have entrenched gerrymanders that ensure continued minority rule in states like Wisconsin. They have sued to let state legislatures set aside the results of a state presidential vote. And they have repeatedly called for the 2020 presidential election to be overturned.

Not content to block majorities from setting the direction of this country with their votes, Republican officials want to limit what those majorities can do with their money.

In particular, they are trying to reverse the growing trend of companies accounting for and acting on climate change as part of their business. Instead, Republican state officers are using regulatory tools and the public pulpit to pressure banks and large investors into ignoring climate change’s impacts on their finances, the economy, and the planet.

The ultimate goal is to coerce asset managers and banks to keep doing business with the fossil fuel companies sponsoring this campaign, regardless of the long-term financial or climate impacts. Without concerted pushback, these policies could entrench climate denial as a regulatory requirement in the financial system.

These attacks are gaining traction because of an accelerating shift in the way the customers and investors of financial institutions expect these businesses to behave. Retail and institutional investors alike are recognizing that vulnerability to climate change and preparedness for a renewable energy transition matter to a company’s performance.

Financial firms choosing to make straightforward business decisions based on economic reality and customer and investor demand are drawing the ire of Republican politicians. Recently, Senator Pat Toomey, the leading Republican on the Senate Banking Committee, demanded that large bank CEOs stop paying attention to ostensibly social issues like climate change, lest Republicans start making their own demand when they’re in power.

But Republicans are already in power in many states, and they’re not waiting to make demands.

Laws recently passed in states like Texas and West Virginia are framed as “anti-boycott” provisions. Pushed by fossil-funded front groups like the American Petroleum Institute, these laws require banks and asset managers to certify that they are not boycotting politically protected industries, like oil and gas. If the state concludes a boycott is happening, it will deny the firms a chance to hold on to their deposits, to sell bonds on behalf of its municipalities, or to manage state pension funds.

In other words, the states are boycotting banks or asset managers who won’t do business with their favored companies. West Virginia’s recent bar on business with JPMorgan Chase, still the world’s largest financier of fossil fuels, for a coal exclusion policy, shows that even a modest attempt to mitigate climate-related risks is too much for some of these groups.

The only constituency for these laws is a few fossil fuel companies and the officials they back. Banks aren’t asking for this. A proposed law failed in Indiana in the face of pressure from the state’s bank lobby. And the laws harm residents: one study found they are likely to cost the public far more than they ever affect a megabank.

For Republican officials already insulated from democratic accountability, that trade-off is worth it. Indeed, the democracy deficit incentivizes these officials to find new ways to threaten financial institutions for taking climate change seriously.

Recently, Arizona Attorney General Mark Brnovich and seventeen other Republican Attorneys General sent a letter accusing Blackrock, the world’s largest asset manager, of misspending state citizens’ dollars to pursue climate goals at the expense of returns.

The letter describes Blackrock’s public climate commitments and its climate-driven investing decisions as potentially violating state law. In particular, Brnovich says that, when Blackrock accounts for climate change in selecting investments, it violates its duty to act in its client’s best interests.

In an accompanying Wall Street Journal op-ed, Brnovich accuses Blackrock of making climate commitments to market itself to investors. This makes his real objection much clearer: Brnovich is mad that Blackrock is giving investors the option to pursue goals he disagrees with.

Brnovich understands that Blackrock isn’t imposing its preferences on its investors, it’s just meeting their needs. This letter is designed to get them to stop paying attention to the majority and start paying attention to him.

The ties here to disdain for democracy are clear. In November 2020, Brnovich notably refused to toe the Trumpian line and certified the Arizona vote. But after drawing derision from Trump, Brnovich changed his tune. After his entry into the Arizona Republican Senate primary, Brnovich told Steve Bannon “I think we all know what happened in 2020.”

Republican elected officials are willing to change their tune and endorse and abet attacks on elections in order to hold power. It shouldn’t be a surprise that they’ll use that power to entrench unpopular beliefs like climate denial where it serves their funders’ interests.